Tuesday, January 17, 2006

ENVIROMENTAL ECCENOMICS OF MANUFACTUREING

After seeing your website and some of the initiatives you are involved in, such as the tsumani relief effort, I have a hunch, that environmental, social and economic sustainability is also ofinterest to you. Can you please tell me a little more about the your Taiwanese Manufacturer and your company vis-a-vis sustainable practices. Look forward to your reply.

I am glad you approve of what we do. You touch on the ethical debate I frequently have with myself, sadly there are no easy or obvious answerers. Our manufacturer in Taiwan is Pacific Cycles. I feel there are four issues at play here, Taiwan as a country, Pacific as an employer, Pacific's environmental credentials, and the environmental cost of manufacturing location. I fear this is a bit long winded and rambling, but I owe you as full a picture as practical and hope there are enough nuggets of information to help you form a valid opinion about us. I'd also empahsis that all this is of the top of my head without research or reference, so take it with a pinch of salt.

IN SUMMARY In essence I would say all manufacturers look to the bottom line, but Pacific is small, responsible, and forward looking. We manufacture with them because economics drive it, but strategically we aim to manufacture as locally to the customer as possible. But wherever a product such as ours is manufactured the raw materials come from much the same place(they are after all a sophisticated form of oil & Bauxite).

CARRY FREEDOM AIM Firstly Carry Freedom is a manifesto/idea rather than a company or a product, score out the right letters and Carry Freedom becomes Car Free. I believe societies that cycle are happier, healthier and more benign than those that don't. I created Carry Freedom to makes it easier for any cyclist to carry even if they have no money. The sophistication of our offering is that it makes its case on practical/economic grounds with the positive environmental/social impact there but buried deeper.Carry Freedom is the idea of Carry Freedom, other people such as Chariot USED and Extra sell the physical manifestation of the idea, and Pacific make it. We simply coordinate the brand, the design, and the vision, which is what we are good at. As an aside have a look at the USED web site www.used-hq.com their hook line is "if you wont use it, dont buy it". USED are our European distributor, and have a very progressive outlook/philosophy.

PACIFIC CYCLES I would say Taiwan is democratic, respects human rights has a social safety net, and looks after its Citizens. Pacific is small (120employees) family owned/run, and cares deeply for its employees as if they were family. Pacific is environmentally responsible(above average), but this is not their main focus. Most of their environmental practices are easy, and good practice, rather than progressive (except for their wooded garden that surrounds their factory). Also Pacifics develop niche bikes, with an indulgence of progressive but unprofitable projects like the ZEM (Zero Emissions Machine a Four wheel pedal car for four adults), and high quality folding bikes that work and genuinely make travel easier.

MANUFACTURING IN GENERAL In reality most raw materials in the world are mined either in Australia or South America, and processed largely in China. Significantly this also goes for US Aluminium and steel which is shipped into the US as ingot or pre drawn sections. Assembly then takes place wherever before being shipped to the end consumer in US or Europe. For low-labour/high-tech this will be in the west, high-labour/low-tech in the east. Simply put I can buy 20 Chinese hours for one US hour or 10 Taiwanese hours.

Its also worth noting that wherever a bicycle or bike trailer is made the bulk of it will in actuality come from China. For example to a trailer made by Chariot in Canada counts as made in Canada if 60% of its value was created in country. This means 40% can be bought directly from China. The Canadian companies who supply the 60% stuff can all buy their stock from China (eg nuts bolts wheels etc). So in Chariots case all generic components will be China origin even though they qualify as canadian content, while most of the specific bits (frames/tents etc) are made in China, so in reality Made in Canada simply means Assembled in Canada. And assembled in Canada is more to do with duty rates, quality control and inventory value, rather than freight mileage considerations. Fundamentally all raw materials originate in the same places, and make similar journeys around the world, just in different forms. I pick on Chariot not because they are bad, but because they are one of the most responsible companies I know, and an example of industry responsibility and best practice, yet even they are subject to the underlying driver of industry, cost.

UNDERLYING DRIVER Cost: whichever is demonstrably cheaper(more cost effective) will win out. Environmental responsibility works out as cheaper for the planet but generally more costly for the individual concerned(certainly in the short term). No individual manufacturer wherever they are will make expensive changes to their practices unless its an industry wide move (normally compelled by legislation) or if there is a distinct competitive advantage to be had. Sadly there are not enough individuals in the value chain willing to pay extra for manufacturing that prioritizes environmental sustainability. The scale and depth of the supply chain inhibit any quick movement in this direction (for just now). And the accountants inability to create an effective book cost for environmental harm inhibits companies to account for it. (exceptions include the Europeans move to commodity trade Carbon emissions so there is financial gain to be had from being progressive)

BACK TO US We are unusual because our care for our social/environment impact is our primary concern, and money is simply a means to this end. But for us as well as Chariot economics and competition dominate our day to day life. If we dont make proffit and grow, we will not survive when fighting with other companies that are. Strategically we know the oil price can only keep on rising, (there is no other option as supply's reduce and demand rises), so cost of shipping and raw materials will also rise, and at some point it will become more economic to manufacture locally than centrally. We plan for this with some of our lines being made in Poland now, and some more planned for production in Germany (where most of our customers are). So we are ready to manufacture local to our customers, and look forward to the day when we can afford to do so. Underlying any move though will be the economics of it. Extra direct costs affect our price relative to our competition and normal people will not pay that much extra for something that does not give them any direct benefit (apart from a warm right-on glow). Having said that we have an edge because we take more head to enviromental/social issues, and are genuinely driven by them.

Our bicycle trailers offer a technical practical alternative for haulage as the world transitions from cheap energy now to expensive energy in the future. We aim to be mainstream so we can help ordinary people who dont know/care of these things to live an environmentally positive life. Bicycle trailers by their nature encourage localism since they carry small packets of goods short distances.

The bamboo trailer is our proudest moment. Made locally from local materials to fit local needs, it turns the most efficient form of transport into the most efficient form of haulage, and it is created by the most efficient method. It subverts the whole system we are part of and that is deliberate. It is the extreme end of local manufacturing, and it is as popular in the west as it is in the developing world.

OUR SUSTAINABILITY Carry Freedom is actually part of a farm. The business itself operates out of a converted chicken shed which is now in its third life. This is wooden and well insulated, our power consumption is trace since we don't need to heat the building(well insulated) or light it (big windows). More generally the farm is a mix of livestock grazing and managed broadleaf woodland. The woodland creates shelter, the better trees are planked, and the poorer trees are burnt to provide heating for the farm. The livestock grazing is low intensity on unimproved ground.

We are planning to instal a wind turbine for our own power and to feed back to the Grid, and solar water heaters to reduce our wood consumption. Also Scotland is building a power station that is powered by willow trees, we may grow crops for this. In my spare time I toy with building sub earth buildings out of old car tyres, with a view to replacing our chicken shed with such a building when it reaches the end of its (long) life.

Our customers do amazing things with the trailers. For many individuals they are the final step in giving up their car, and many companies(who care nothing for the environment) use them in large numbers to reduce their transport cost/travel time. There is a notable number of people who are setting up businesses with our trailers at the core. Also one of our bike dealers experiments with fuel cells, he now uses our trailers as a platform since then there is enough separation between rider and the hydrogen to make the explosion risks acceptable/survivable.

I fear I have rambled far too long to answer what was a pretty straight forward question, but like I say with manufacturing there is no easy answer to all the competing /opposing issues. I feel we strike a good balance between best environmental practice and best economic practice, and I hope there is enough information for you to make a similar judgment. I would also note in regards to your project that if our products are not suitable we are happy to either adapt them specifically to suit your project, or create a custom solution for your need, this is after all what we are expert at.

5 Comments:

Our company is rapidly growing and offers you an extraordinary income helping others succeed. The primary requirement is to follow up on client inquiries and point them in the right direction. It is stress free, rewarding and straightforward work.

Webmail program for the major free email sites -http://inovasphere.com/mmail.htm

My Mail 1.0 is configured to work with AOL, Gmail, Hotmail, Linuxmail, and Yahoo. With My Mail 1.0 you get the benefit of premium services without having to pay site fees. My Mail 1.0 completely automates the process of sending and receiving mail from the major sites, saving you time and trouble.

My Mail 1.0 eliminates the need to visit web sites to send and receive mail, which increases the speed of sending and receiving email by over 80%, even if they do not offer what is known as POP3, IMAP and SMTP. My Mail 1.0's look is also fully customizable. One you use it, you'll never want to go back to the web site again to get your mail.

I've been using the city trailer for about 4-5 years now and it's the most stable brilliant trailer on the planet in my somewhat less than humble opinion. I've managed to strip the thread on one of the connecting brackets however and can't find anywhere that stocks replacement parts. Please help.